Article (three parts) from the Yahoo board that maybe of interest.
Happy Holidays all,
Mike
Phone-Equipment Profits at Records on Internet Demand: Outlook
Phone-Equipment Profits at Records on Internet Demand: Outlook
Denver, Dec. 23 (Bloomberg) -- Sam Robinson is a big reason
many of North America's telecommunications equipment and parts
makers, including Nortel Networks Corp. and JDS Uniphase Corp.,
will have record profits in the fourth quarter.
The chief technology officer at software maker Eclipsys
Corp. hooked up a digital subscriber line last month, boosting
the speed of his Internet connection by five times over a
traditional dial-up modem. Already he's asking U S West Inc. to
bring an even faster DSL service to his neighborhood.
``I need as much bandwidth as I can get,' said Robinson,
who telecommutes from his Denver home to Eclipsys headquarters in
Delray Beach, Florida. ``It's my lifeline to the outside world.'
U S West is buying more Cisco Systems Inc. equipment to add
10,000 new digital subscriber lines a month. The purchases are
part of the billions of dollars phone companies are spending on
everything from switches to fiber-optic components to networking
chips as they try to satisfy demand from consumers and companies
doing business over the Internet.
That means higher profits at Tellabs Inc., the biggest maker
of equipment that regulates traffic on phone networks, and Xilinx
Inc., the No. 1 maker of logic chips that can be programmed for
telecommunications gear. Startups like Juniper Networks Inc. and
Redback Networks Inc. will be profitable for the first time.
``We're probably looking at the best of all possible
worlds,' said analyst Bill Burt of Eaton Vance Management, which
runs $41 billion of assets in Boston. ``Everyone is sold out up
and down the chain.'
Wireless, Fiber-Optics Boom
Nowhere is business stronger than in wireless equipment.
Shares of Qualcomm Inc., which is selling its cellular-phone
business but will still make semiconductors that run the phones,
are leading the Standard & Poor's 500 Index. The shares have
surged more than 18-fold since Dec. 31, 1998.
Qualcomm is benefiting as mobile-phone makers like Nokia Oyj
pay to use its digital cell-phone standard, the fastest-growing
in the world. The company will see its profit almost triple in
its fiscal first quarter to 95 cents a share from 33 cents,
according to analysts polled by First Call/Thomson Financial.
For Lucent Technologies Inc., the rise to record profit may
be overshadowed by a slowdown in sales growth, analysts said. The
biggest maker of telecommunications equipment is expected to earn
54 cents a share in its first quarter that ends Dec. 31, compared
with 49 cents in the year-ago period.
``The concern is revenue growth,' said Gregory Geiling, a
J.P. Morgan Securities Inc. analyst, who rates Lucent a ``buy.'
``Relative to Nortel and Cisco, it's not going to look great.'
Lucent's sales growth, 20 percent in fiscal 1999, will slide
to about 15 percent in its first quarter, Geiling said.
Still, the company is doing a booming business in wireless
gear as well as data-networking and fiber-optic equipment, its
products for high-speed telecommunications networks. FleetBoston
Robertson Stephens Inc. analyst Paul Silverstein expects sales of
those products to rise at least 30 percent in fiscal 2000.
Record for Nortel
Nortel |
